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It’s Time to Ditch the Spaghetti Diagrams

February 1st, 2012

Let me explain a little bit about these phases and why they are important to the business. The help me phase will be when retailers leverage social and mobile data to make better business decisions. Think of this as focus groups 2.0. This phase of the Information Revolution has already begun. Companies are mining social and mobile data looking for brand sentiment and, in some cases, engaging with their customers. But in my experience looking at most of the Facebook pages and Twitter feeds, most retailers do not understand the word “engagement” (but that is for another column).

The help you phase is all about marketing optimization. This is where The Children’s Place is. The company is using its business data, combined with social data, to enhance marketing efforts within its E-mail platform. The Children’s Place hired some really smart mathematicians from MIT to create algorithms that best optimize the offers for its customers. The company hopes to get from 80 percent to 100 percent customized.

The final phase of Customer Optimization, the help me, help you phase, is the ultimate nirvana. In this phase, retailers will not have loyalty programs, E-mail marketing programs and online merchandizing programs. Instead, each customer (or potential customer) will have a unique program built for them. This is taking personalization to a whole new level. If a customer never opens an E-mail offer but responds to a Facebook or Twitter update, you will stop sending those people E-mails. The Web site and mobile interface will be customized to drive a behavior, such as moving a browser to a buyer or increasing frequency.

If you think this is farfetched, I suggest you call some people in the casino marketing business and ask them about the evolution of their marketing strategy.

Why is this important? Because as the marketing opportunities for retailers continue to splinter, and the signal-to-noise ratio continues to get worse, retailers will find themselves quickly “competing on relationship.” When costs and convenience are neutralized, people will buy from the retailers that they have the best relationship with and where they have the best experience. If you haven’t extracted meaningful insight from your customers’ social and mobile data to better engage with them or to create a better experience for them, someone else will

So what does that mean for the guy or gal who is responsible for moving all of that data around? First, I think you’ll laugh every time someone mentions that “social media is free,” because social data is about to become the biggest and most expensive project you have ever done.

You need to learn about open-source projects like Apache Hadoop and what it means to process large amounts of unstructured data. You need to understand the mechanics of social CRM and how your company can use this type of tool to operationalize marketing data into actions in the store and online.

You need to create a new information architecture that uses an enterprise service bus to create services to move data, rather than interfaces. Think about data being “published” and “subscribed to.” You need to create a plan to migrate and retire your existing interfaces. This becomes critical, because your marketing team doesn’t yet know what to ask for, so you need to build a system that is designed to help them answer questions they don’t yet know they want to ask.

You need to imagine a time where you spin up a thousand virtual servers to process a nightly batch, only to wind them down again the next day. And that night is closer than you think).

What do you think? If you disagree (or even, heaven forbid, agree), please comment below or send me a private message. Or check out the Twitter discussion on @todd_michaud.


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